Trust Distribution Minute Template and Generator

Updated 8 September 2026

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The 30 June deadline, and why it is hard

The trustee must resolve to distribute the income of the trust by 30 June of the year concerned. Not by lodgement, not by 31 October, and not when the accounts are finished. If there is no valid resolution by 30 June, the beneficiaries are not presently entitled and the trustee is assessed on the income at the top marginal rate.

The awkward part is that on 30 June nobody knows what the income is. That is normal and it is why resolutions are written in percentages, or in a defined order of amounts, rather than in dollars. A resolution expressed as a share of whatever the income turns out to be is valid; one that guesses a dollar figure and gets it wrong leaves a remainder.

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Why the shares have to total 100%

The resolution has to deal with the whole of the income. Distribute 90% and the remaining 10% is income to which no beneficiary is presently entitled, so the trustee is assessed on it under section 99A at 47%.

This is why the generator refuses to produce a document where the shares do not add to 100. It is also why most well drafted resolutions name a default or balance beneficiary to take whatever is left, which removes the arithmetic risk entirely.

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Franked distributions and capital gains have different dates

If you want franking credits or a capital gain to follow a particular beneficiary rather than being spread with everything else, the entitlement has to be recorded specifically. The two deadlines are not the same, and this is the detail most often got wrong.

So the capital gain entitlement can be recorded after 30 June, but the franked distribution entitlement cannot. In practice the simplest approach is to do both in the 30 June resolution and treat 31 August as a safety net rather than a plan.

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The family trust election

Without a family trust election, a discretionary trust generally cannot pass franking credits through to beneficiaries, because it will usually fail the holding period rules that apply to the shares generating the dividends.

An election has consequences of its own. Distributing outside the family group afterwards attracts family trust distribution tax at 47%, and the definition of the family group is narrower than most families assume. It is not a form to lodge casually, but if the trust holds shares and you want the credits to reach the beneficiaries, it is usually necessary.

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Company beneficiaries after Bendel

Distributing to a corporate beneficiary and leaving the entitlement unpaid creates an unpaid present entitlement. The long-running question has been whether a UPE is a loan for Division 7A purposes, and the Bendel decision moved that position.

What has not changed is that a UPE left sitting indefinitely attracts attention on other grounds, that section 100A applies to the arrangement independently, and that the safest structures either pay the entitlement or put it on complying loan terms. Where a company beneficiary is used, the generator adds the wording and points you at the Division 7A tools, because the two decisions are made together rather than in sequence.

Getting the money to the company and back is where most groups come unstuck, and it is worth modelling the minimum yearly repayment before the resolution is signed rather than after.

Provisions referenced: present entitlement by 30 June; trustee assessment under s99A at 47%; specific entitlement to franked distributions by 30 June under s207-58; specific entitlement to capital gains by 31 August under s115-228; family trust distribution tax at 47%. Verified 8 September 2026. This generator produces a draft for your accountant or solicitor to settle against the trust deed. It is not a substitute for reading the deed.

Trust distribution FAQ

When must a trust distribution minute be signed?

By 30 June of the income year it relates to. The resolution creates present entitlement, and present entitlement has to exist at year end. Signing in July for the year that closed in June does not work, and dating it earlier than it was signed is a much bigger problem than the tax.

What are the minutes of a trust?

A written record of a decision made by the trustee. For a discretionary trust the annual distribution minute records how the trustee has exercised its discretion over that year's income: which beneficiaries take what share, and whether any franked distributions or capital gains are being directed to particular beneficiaries.

What happens if we distribute less than 100%?

The undistributed part is income to which no beneficiary is presently entitled and the trustee is assessed on it at 47% under section 99A. Naming a balance beneficiary who takes the remainder is the standard way to remove that risk, and it costs nothing to include.

How many days do we have to distribute trust income?

None after year end for the resolution itself, which must be made by 30 June. The one genuine extension is for capital gains: a specific entitlement to a capital gain can be recorded by 31 August, two months after year end, under section 115-228. Franked distributions do not get that extension.

Can we distribute to a company?

Yes, if the deed allows it. The complication is what happens to the entitlement afterwards. An unpaid present entitlement left with the company raises Division 7A and section 100A questions, and the Bendel decision changed part of that landscape without removing the need to deal with it deliberately.

Do we need a family trust election to pass on franking credits?

Usually yes. Without one, a discretionary trust generally fails the holding period rules and the credits do not reach the beneficiaries. The trade-off is family trust distribution tax at 47% on anything distributed outside the family group, so the election should be made deliberately rather than as a default.

General information only, prepared without regard to your objectives, financial situation or needs. It is not legal, financial product or taxation advice and should not be relied on as such. Documents generated here are drafts to be settled against the trust deed by your adviser. Liability limited by a scheme approved under Professional Standards Legislation.